‘Strong’ execution helps Bam Construction UK back to profit

The UK construction arm of Netherlands-based Royal Bam has bounced back into the black with “a solid increase” in turnover and “strong” project execution.

Bam Construction UK generated adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of €31.1m (£27.1m) in the year to 31 December 2025, according to Royal Bam’s annual results, announced this morning.

This marked a comeback from the previous year’s EBITDA loss of €27.4m.

Turnover rose by 7 per cent from €1.05bn to €1.12bn, as Royal Bam said the start of new projects in 2025 helped to drive a “solid increase” in UK construction revenue.

It added that “strong execution and a disciplined, selective approach to tendering” supported the return to profitability last year.

Elaborating on this theme, Bam UK & Ireland chief operating officer John Wilkinson told Construction News that the construction business has actively sought to avoid traditional single-stage, fixed-price jobs.

“Those days are basically past us,” he said. “We’re very much focused now on two-stage [contracting], with pre-contract phases that mean we can mature the design and have confidence in the pricing because of that.

“When you went into projects with immature design, that’s when you get problems, and that’s when both parties lose.”

The group’s UK construction operations delivered a profit margin of 2.8 per cent last year compared with -2.6 per cent in 2024.

Royal Bam cited project milestones during the year such as the eventual completion of the troubled Co-op Live arena in Manchester and the opening of the Silvertown Tunnel in east London.

Other contract wins in 2025, not mentioned in today’s announcement, included a £100m job from British Land to overhaul the 34-storey Broadgate Tower (pictured) near Liverpool Street station in London, plus a £45.4m Shetland ferry infrastructure contract.

In the education sector, Bam is rebuilding Framwellgate School in Durham under a £67.9m deal awarded in November by the Department for Education (DfE) under its CF21 framework.

The firm was also announced as one of 42 contractors on the DfE’s new £15.4bn framework.

But in April, Bam withdrew from a project to build the £671m Royal Victoria children’s hospital in Belfast, just weeks after it was named as one of the contractors.

The firm was due to develop the hospital as part of its ongoing joint venture with Northern Ireland-based Graham Construction, but said it took a “commercial decision” not to proceed with the scheme.

Wilkinson said that there were two main reasons behind that decision: Bam decided to prioritise another children’s hospital job in Dublin, and the “commercial model [in the Belfast scheme] wasn’t right for us”.

Bam’s UK civil engineering activities, primarily its Bam Nuttall business, returned mixed results. While turnover increased by 8 per cent to €1.78bn, adjusted EBITDA fell year on year by 10 per cent to €92.2m.

Similarly, the group’s Irish operations saw adjusted EBITDA fall by a fifth while revenue rose by 22 per cent compared with 2024.

Wilkinson insisted that Bam Nuttall is still “slightly outperforming” its civils rivals, and said the firm’s lower EBITDA was partly attributable to the cost of moving to a new head office in Farnborough.

The depreciation of the British pound against the euro had a €25m negative effect on Bam’s UK operations to overall group earnings and a €337m impact on the overall order book at the end of 2025, Royal Bam said.

This meant the UK and Ireland order book was 4 per cent lower than at 31 December 2024.

Royal Bam groups 10 companies in its UK and Ireland division into four business segments: Bam Construction UK, the core UK operating business; civils firm Bam Nuttall; Irish contracting business Bam Contractors (Ireland); and Bam Ventures (comprising its facilities management, real estate development, geotechnical and plant activities).

Looking ahead, Royal Bam said it expects the UK construction market to “strengthen” amid a continued focus on energy security.

“The government’s 10-year infrastructure plan is ambitious, and defence investment is also set to increase,” the group added in its results announcement.

“The recently approved UK Planning and Infrastructure Bill has the potential to accelerate approvals for major projects. In London, commercial planning activity is rising, with growing emphasis on retrofit developments.”